`NEVER DO IT AGAIN LIKE THAT'

As Pavarotti names the first Channel Tunnel who made it possible: Sir Alastair Morton

ONE OF TWO telephones rang on the chief executive's desk. He crossed the room to pick it up, only to find that the ringing had switched to the second phone. Somehow, each time he picked up one receiver, the other instrument carried on ringing. There were 15 or 20 rings, com- pletely dislocating our conversation. It was the sort of incident which drives big busi- nessmen to fury.

But this was no ordinary big business- man. This was Sir Alastair Morton of Eurotunnel, the South African-born bruis- er who by the sheer force of his personality has succeeded in reconnecting Britain and France for the first time since the Ice Age, the man on whom the profile-writers have worn out thesauruses trying to find new ways to describe his legendary ferocity. I waited for the explosion.

All that happened, I can report, is that he muttered 'Technology defeats me' and strolled meekly out, the phone ringing all the while, to ask his secretary to deal with it; it was a wrong number. Not a flicker of ego or irritation. This is the post-Tunnel Morton, so mellow that he might have been auditioning for a decaffeinated coffee advertisement. It is easy to imagine the state of relaxation which a tunneller experiences at the end of a big job: post-coital seems the most appropriate word.

It was, he says, 'a very tiring, very demanding experience'. Both operationally and financially, it's not quite over yet. More delays were announced a few hours after I met him; freight services through the tunnel were due to start this week, but all that emerged at Folkestone was Luciano Pavarotti, who had come to name a shuttle locomotive after himself. Mean- while, the 600,000 shareholders whose interests Morton represents will be asked in April to come up with a final slice of capital to straighten Eurotunnel's balance sheet; if they decline to do so, Morton will be back in the ring for 15 more rounds with his bankers, who could yet end up as the effective owners of the project.

`In almost any company he starts the conversation with a blow to the face,' one 'friend of long standing' was quoted as saying recently. 'Frighteningly belligerent' is another version. Some senior contrac- tors on the tunnel are said to have refused to deal with him at all. As a younger man, he was a corporate McEnroe: long before the tunnel — after Morton had stormed out of his job as managing director of the British National Oil Corporation and was busy shaking up a tottering finance house called Guinness Peat — I remember a conversation among my fellow City bankers as to who was the most fearsome person they had ever encountered in business. Alastair Morton won by acclaim.

But Morton is at pains to suggest that there was nothing personal about the ver- bal head-butts which punctuated his deal- ing with the contractors in the Transmanche Link consortium, his tirades about 'blackmailers' and 'deceit', the breathtakingly intemperate private corre- spondence which found its way into the press. There were, after all, only two of 'us' (himself and his French co-chairman, Andre Bernard) ranged against 11 of 'them', ten construction company chiefs and, latterly, their chief executive, Jack Lemley, an American who proved ready to match Morton punch for punch. They were, he says 'often very nice on social occasions; many of them are thoroughly charming' — the second sentiment deliv- ered with a slight hesitation, as though he knows no one will quite believe it of him.

'When you're arguing about eight or ten billion, don't you think it's reasonable that occasionally you disagree rather strongly? They were the ones who signed a contract to deliver and it wasn't being delivered, so shouldn't there be the odd wail of anguish?'

His detractors suggest that the disagree- ments would have been solved quicker with less of Morton's fireworks. During the stalemate which persisted throughout most of last year, before the Bank of England intervened to find a compromise, one con- tractor was heard to remark, The only thing you can guarantee will be open in December is Morton's mouth.'

But the cause of almost all the problems, Morton says, was not the personalities on either side but the structure of the project itself. The promoters of Eurotunnel were the ten contractors and a syndicate of banks; in between them was a vacuum. The contractors negotiated their own construc- tion contract and sold it to the banks. Eurotunnel itself, the contractors' client, the company which now owns and is about to operate the tunnel, was initially no more than a blank sheet of paper.

'We were portrayed as over-forceful, bul- lying these poor little contractors. But Eurotunnel was absolutely weak. It was an embryo, an infant, a child . . . an adoles- cent if you like.' (Morton has a tendency to grope self-consciously for figures of speech: talking about Britain at the end of the cen- tury, he asked, in his toned-down South African twang, `Do you mean "up the Swa- nee" or down it?') 'Eurotunnel never had its own money. It existed to manage a flow of money from one set of promoters, these bureaucratical- ly immobilised bankers, all 223 of them, to the other, these overbearing contractors. Eurotunnel never had the initiative, but succeeded in keeping the initiative away from the other two; it was an eternal trian- gle, constantly jockeying for position. Meanwhile the contractors were increas- ingly desperate; their businesses got into deeper and deeper trouble. And they blamed us; they said Eurotunnel was a terrible client, it didn't know what it was doing. Until 1990 they were probably right.'

His darkest moment, the point at which the project came closest to failing, was in February 1990. Tunnelling costs were spi- ralling out of control and the tunnellers were way behind schedule. Morton was accused of interfering in their work, of refusing to pay for what had already been completed. It was, he says, 'one hell of a showdown'. But the banks, anxious to pro- tect their own position, were prepared to back him. He became chief executive as well as co-chairman, whilst a project man- ager was inserted between him and the contractors. The contractors agreed to bear a slice of the cost overruns, and replaced several of their top man- agers.

He claims that he never despaired. Once past that point of crisis, 'The closer you got to the end, the harder it became for any- one to stop it. The arguments remained as fierce, but the likelihood that there would be an answer grew with time. The banks were already so many billion down the hole; it didn't stop them making life more and more miserable, but they weren't like- ly to call a halt.'

So the tunnellers met in the middle in December 1990, and the Queen and Presi- dent Mitterrand will perform the official opening ceremony (whether or not the tunnel has actually come into commercial use by then) on 6 May. 'What does it teach you?' Morton asks himself. 'It teaches you never to do it again like that. Get your project better defined, your relationships better tied down. And there has to be a real client; a project without a client is a project in trouble from the outset.'

There are also important lessons about the interaction of public interest and pri- vate finance. It is a curious irony that Mor- ton, relentless scourge of transport ministers for their failure to make intelli- gent use of public money alongside private investment, is the man who, by bloody- minded determination, has proved the ulti- mate Thatcherite proposition: that the Channel Tunnel, the greatest engineering feat of the 20th century, could be built entirely by private enterprise.

But he has never disguised his contempt for the Government's failure to provide a fast rail link to London to match the ser- vice already installed at the French end of 'I'd like six jam tarts, a pair of cufflinks and a tie-pin to be taken into consideration.' the tunnel, or his irritation at the costs imposed on Eurotunnel's investors by additional safety and environmental requirements — £85 million in Folkestone alone — costs which he believes the public purse ought to be willing to bear.

Treasury officials have come in for regu- lar hammering from him in the past, 'and I don't intend to stop', he says. Sensitive flowers in Whitehall were no doubt horri- fied to learn that Chancellor Kenneth Clarke, describing Morton as a 'veritable warrior', had asked him to chair the Trea- sury's Private Finance Working Group, which will explore new ways of financing transport projects.

He has two favourite themes: that there should be serious long-term planning, rather than living off our own future by constant underspending; and that investors should be allowed to make rea- sonable commercial profits, something which the Treasury has so far been quite unable to swallow. But Morton says that he is beginning to see signs of movement in Whitehall: incoherent, terrified of set- ting the wrong precedents or being taken for a ride, but movement in the right direction.

'The fact is that the Treasury's fifty bil- lion in the red before we start. If it [the Working Group] doesn't succeed, there won't be any investment and this country will be down the Swanee vis-à-vis the rest of Europe by the end of the century. We just won't be functioning.'

I wondered why, with his newly relaxed frame of mind, with all the congenial boardroom chairs which must now be on offer to him, with his admiration for the kind of French grand projet which we British disdain, he should choose to spe- cialise in British infrastructure problems, a thankless task in a sector which he himself describes as 'utterly mired down'.

'It's like oil exploration in the North Sea,' he answered. 'It's fun because it's optimistic. Oilmen are always inclined to have a go, to lick any challenge — very deep water, terrible storms. I feel at home in that.'

Morton's father was Scottish and his mother was an Afrikaner. He studied at Oxford and has worked in England since 1967, but still thinks of himself as an out- sider. The English attitude which he finds so foreign was encapsulated for him long ago by Sheffield steel-workers with whom he had dealings as an executive of Harold Wilson's Industrial Reorganisation Corpor- tion. To every new proposition, their response was, 'There'll be trouble if you do that.'

There was certainly trouble at the Tun- nel, but he got the job done. 'You only do something like that once,' he sighs. It's dif- ficult to think of an Englishman who could have done it at all.